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This article is by Noah Kerner, co-founder and CEO of Noise, which helps clients innovate for the 18-34 market.

Several years back, I was having a conversation with my friend Matt Jacobson who runs market development at Facebook. I asked him how much money Facebook had spent on marketing. "600 bucks," he told me. "And $400 of that was used to buy promo t-shirts for an event." Facebook had grown to about 20 million users by that point.

(Image credit: AFP/Getty Images via @daylife)

Instagram, purchased by Facebook in 2012, has a similar growth history. When first released, it gained 25,000 users in the first 24 hours, all because of word of mouth and support from some influential friends in Silicon Valley. By the time it was sold, 18 months later, Instagram had 30 million users. YouTube sees more than 800 million unique visitors each month. Amazon sold 26.5 million items last Cyber Monday alone. Wikipedia now has almost 25 million articles written in 285 different languages, contributed to by more than 38 million users. The list goes on and on. How did these companies become so phenomenally successful? Great product.

Success in the digital world isn't won with marketing dollars. It's won with world-class product development. Yet marketers often use the same old approach to digital: Spend a small percentage of the budget on production and a really big percentage on media. In other words, make something OK and buy a bunch of traffic to stoke numbers.

While this might deliver on a short-term "KPI" goal, it does little for brand building or long-term success.

A better model is the model that's been working in digital since day one: Create, seed, iterate, keep seeding, iterate some more and then "pivot" if necessary. Who gets it totally right on the first try anyway? Twitter started as a podcasting company called Odeo. Rovio created 51 games before they made Angry Birds. Flickr was originally just a tiny part of an online game. The founders of Yelp tried to revolutionize email before actually revolutionizing local reviews. And Instagram started out as a Foursquare competitor, but then scrapped the idea in favor of photo sharing. There's a reason that "pivoting" is now a start-up cliché.

Today's more progressive companies are starting to talk about agile development. Some are even employing it. But the need for change is bigger than that. It's not just about an agile method of development. It's also about an agile method of budgeting and marketing.

What's needed is a totally new approach--a rethinking of asset allocation. Try taking the $9 million media budget and the $1 million production budget and inverting them. Spend $6 million producing lots of great digital ideas. Then take $500,000 and seed each of those ideas in different communities. Then take another $2 million and iterate on all of those ideas based off of user response. Take another $250,000 to continue seeding those ideas in more communities. Finally, take $1 million to iterate some more and make a few pivots. And take the last $250,00 to seed them again.

This new approach is predicated on three truths:

1. In digital, things either take off fast or fail fast.

2. When something doesn't work, there may be a simple tweak that will make it work (or not).

3. Different ideas resonate with different communities, so while seeding an idea in one vertical may not drive adoption, seeding it in another may take it to the moon.

One of our more recent creations was a music app called Falling Stars for iOS. In the first year we’ve seen over 2 million downloads, 10 million plays, listings as staff favorites on iTunes and incredible ratings. All the marketing we needed happened organically, sparked by a solid product.

If companies continue thinking of marketing as the secret sauce in digital, they'll fall behind. Great product innovations are what customers want. When you’ve developed something fantastic that everyone’s talking about already, when you’ve built up critical mass, then and only then should you think about devoting your hard-earned cash to marketing. A splashy ad campaign says you’ve made it; it’s not for brands on the make.